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WASHINGTON, DC-To say the least, nerves are frayed throughout the financial and capital markets. In this environment, any overture on the part of government would be welcome, but the joint effort of the US Federal Reserve Bank and five other world Central Banks Thursday to inject $180 billion into the global financial system was especially embraced by the battered commercial real estate community.

“Any movements by the Central Banks, including the Fed, that inject liquidity into the banking system are positive news for the real estate finance industry, at least for the short term,” Scott Singer, executive vice president of the New York City-based Singer & Bassuk Organization, tells GlobeSt.com.

“At some point, the various infusions of capital, and rescues, and easing of regulations, and any other actions by governments around the world to prop up financial institutions will stabilize the financial markets, which should result in a march toward recovery and renewed activity.”

Indeed, this latest step–at least the latest as of Thursday–follows several other recent moves by the US monetary authority. On Monday, for example, the Federal Reserve Bank revealed it would expand its lending program as well as accept a wider range of collateral for loans. On Tuesday the European Central Bank, the Swiss National Bank, the Reserve Bank of Australia and China’s Central Bank pumped money into their own economies.

Thursday’s coordinated effort with the European Central Bank, the Swiss National Bank, the Bank of Japan, Bank of England and Bank of Canada is aimed at foreign banks that lend in US dollars. “These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets,” says the Federal Reserve Bank in a statement. “The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures.”

Even with this liquidity injection, it is clear that the deleveraging of the US financial system is going to painfully continue. “The Fed is reacting to events as they occur–it is difficult at this point to see how it can be proactive,” Mark Zytko, principal at Mesa West in Los Angeles, tells GlobeSt.com.

Ultimately, he says, the problem is not any one investment bank’s assets–no matter how deceptively risky or leveraged they may be. “It is the overall level of leverage in the system.”

A less-than-transparent market bottom as well as general paralysis is also plaguing the market–and there is no amount of liquidity that can address these issues, others say. “Sellers are unwilling to sell because they are acting as though the prices they’ve come to expect will rapidly return to the market,” Adam Weissburg, partner at the Los Angeles office of Cox, Castle & Nicholson LLP, tells GlobeSt.com. “Buyers–appropriately–are waiting for sellers to understand the market has changed. Retailer developers are dealing with low consumer confidence. Permanent lenders have been culled such that CMBS transactions are virtually non-existent, and the remaining lenders are concerned about continued uncertainty.”

“Until everyone believes that prices are not going to fall further, development, sale and financing activity will continue to be flat,” he concludes.

“Injections of liquidity are helpful, but only as far as they go,” Dennis Russo, transactional real estate partner at the New York City-based law firm Herrick, Feinstein, tells GlobeSt.com. “They probably will not help the transactions that are currently having issues because the lenders are paralyzed due to fear of the unknown.”

There are other measures Russo and colleagues would like to see the government take to push the markets back to health. For instance, the creation of government guarantees, in some circumstances, on certain portions of commercial real estate debt, could hasten recovery, Russo believes. “There are issues attached to government guarantees, of course–underwriting being only one–but certain guarantees could help heal the commercial real estate finance market.”

Weissburg, for his part, would have liked to see the Fed make another pass at cutting short term interest rates–something it declined to do this week. That “would put more money in the consumers’ pockets.”

About the only good news, Mesa West’s Zytko says, is that at least the unwinding has begun. “We don’t know where we are in that particular process but at least it has started.” With the liquidity injection the process will be somewhat less painful, he says.Indeed, some–such as Duke Runnels, president of FORT Properties in Los Angeles–wish that the $180 billion is only a starting point. “I would have liked to see an additional third injected into the system,” he tells GlobeSt.com. “This is different than a bailout of a particular company–these moves are facilitating liquidity in the world market, which is essential right now.”

The measures taken by the Fed and other Central Banks on Thursday include the authorization of the Federal Reserve’s $180 billion expansion of temporary reciprocal currency arrangements, or swap lines, to provide dollar funding for both term and overnight liquidity operations by the other Central Banks.

The Federal Open Market Committee has also authorized increases in the existing swap lines with the ECB and the Swiss National Bank. These larger facilities will now support the provision of US dollar liquidity in amounts of up to $110 billion by the ECB, an increase of $55 billion, and up to $27 billion by the Swiss National Bank, an increase of $15 billion.

In addition, new swap facilities have been authorized with the Bank of Japan, the Bank of England, and the Bank of Canada. These facilities will support the provision of US dollar liquidity in amounts of up to $60 billion by the Bank of Japan, $40 billion by the Bank of England, and $10 billion by the Bank of Canada.

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